Rivalry in uncertain export markets: commitment versus flexibility

• 成果类型: Article
• 署名作者: Dewit, G; Leahy, D
• 署名单位: Maynooth University; University College Dublin
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(03)00082-5
• 发表日期: 2004
• 页码: 195-209
• 关键词: demand uncertainty; strategic commitment; flexibility; Trade policy; commitment deterrence

摘要

This paper examines optimal trade policy in a two-period oligopoly model, with a home and a foreign firm choosing capital and output. Demand uncertainty, resolved in period two, gives rise to a trade-off between strategic commitment and flexibility in the firms' investment decisions. Finns' investment timing is endogenous and can be manipulated by the home government, which sets a subsidy before firms decide when to invest. We show that when the government wishes to manipulate investment timing, it will choose its policy to deter investment commitment by the home or the foreign firm. (C) 2003 Elsevier B.V. All rights reserved.